August 26, 2016
Last summer (July 22, 2015), Federal Reserve Bank of St. Louis President Jim Bullard hosted a productive two-hour meeting with the Fed Up coalition at the St. Louis Fed. The meeting included Derek Laney, Ady Barkan and nine members of the local Fed Up coalition, Missourians Organizing for Reform and Empowerment.
Since then, St. Louis Fed staff members have been in frequent communication with Mr. Laney. The St. Louis Fed’s Community Development officer met personally with Mr. Laney in June.
Bullard’s policy rate path is very close to Fed Up’s, and he agrees with the coalition’s emphasis on diversity and inclusion, saying the Fed can do better on that front.
In an interview today with CNBC's Steve Liesman, President Bullard commented on his having learned recently that Facebook co-founder and billionaire Dustin Moskovitz was the primary underwriter of Fed Up’s campaign for low interest rates.
Here is what President Bullard said:
Liesman: There have been some protesters here and they have been actually urging the Fed not to raise interest rates. One of the charges is that Fed policy has helped support inequality in this country. Is that fair enough?
Bullard: I found out recently this was funded by Dustin Moskovitz from Facebook. I didn’t really know this was Facebook money. So, I don’t know. I think it’s kind of a funny thing for them to fund because they want low interest rates in an era when we’re awash in lower interest rates. So it’s kind of crazy, isn’t it?
Liesman: That they’re out there saying keep rates low when rates are already low?
Bullard: Rates are low globally; I mean, it’s kind of a different era. We’ve got something else going on.
Liesman: Just to give you their point of view, which I think I understand, is that they don’t want this next thing, which is being talked about, this next one-quarter interest rate hike, and future ones.
Bullard: If it was just zero interest rates forever, how about just support some legislation that just has zero interest rates forever?
Liesman: So you’re saying they should bring their issues to Congress?Bullard: Well first of all, I think Dustin Moskovitz should be here. I mean, maybe he could helicopter in from Sun Valley or something. Why is he sending all these people? If he wants low interest rates, why doesn’t he just come and argue about it?
Liesman: Joe Kernan wants to come and protest for higher rates.
Bullard: Now they do have a good point on diversity and inclusion, which is very important and the Fed is not good at this, and we’ve got to get better, so that’s good. So I think on that, you do have the German labor market reforms, which they cut youth unemployment in half and they brought their unemployment down from 10 percent to below 5 percent, so they’ve been really successful. So I think you should talk to the labor secretary about some of the things that you could do to do that. I think monetary policy is doing all it can on that dimension.
President and Chief Executive Officer
Executive Assistant to the President
Senior Vice President and Chief of Staff to the President
Cletus C. Coughlin
Senior Economist and Special Assistant to the President
"Rationally, let it be said in a whisper, experience is certainly worth more than theory."